Chapter 2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. STRATEGIC PLANNING IN CONTEMPORARY MARKETING

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 1a. What is Market Planning?

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics ▮ Marketing planning - Implementing planning activities devoted to achieving marketing objectives Many planning activities take place over the Internet with virtual conferences

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 1b. What is Planning?

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics ▮ Planning - Anticipating future events and conditions and determining the best way to achieve organizational objectives Continuous process that includes: Identifying objectives Determining the actions through which a firm can attain those objectives Creates a blueprint for everyone in the organization

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics An important trend in marketing planning centers on relationship marketing A firm’s effort to develop long-term, cost-effective links with individual customers and suppliers for mutual benefit

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 2. Define Strategic planning and Tactical planning.

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Strategic Planning Versus Tactical Planning Strategic Planning Determining an organization’s primary objectives and adopting courses of action that will achieve these objectives Provides long-term direction for its decision makers Tactical Planning Guides the implementation of activities specified in the strategic plan Addresses shorter-term actions

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Table Planning at Different Managerial Levels

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 3. What are the steps in the marketing process?

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Steps in the Marketing Planning Process ▮ Defining the organization’s mission and objectives Mission - Essential purpose that differentiates one company from another Walmart: “Save money. Live better.” Infiniti: “Inspired performance.”

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Steps in the Marketing Planning Process ▮ Objectives - Guide the development of marketing objectives and plans For example: Generate a 15 percent profit over the next 24 months Add 25 new outlets within the next year

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Assessing Organizational Resources and Evaluating Environmental Risks and Opportunities ▮ Resources include: Production Marketing Finance Technology Employees ▮ Strengths help planners: Set objectives Develop plans Take advantage of marketing opportunities

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Formulating, Implementing, and Monitoring a Marketing Strategy ▮ Marketing strategy - Selecting and satisfying target consumers through the marketing mix elements ▮ The final steps of the planning process: Marketers put the marketing strategy into action Marketers monitor performance to ensure that objectives are achieved

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Successful Strategies: Tools and Techniques ▮ Porter’s Five Forces model The potential of new entrants The bargaining power of buyers The bargaining power of suppliers The threat of substitute products Rivalry among competitors

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Figure Porter’s Five Forces Model

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing First Mover and Second Mover Strategies ▮ First mover strategy - The company first to offer a product in a marketplace will be the long-term market winner ▮ Second mover strategy - Observing the innovations of first movers and then improving on them to gain advantage in the marketplace

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing SWOT Analysis ▮ Helps planners compare internal organizational strengths and weaknesses with external opportunities and threats Provides managers with a critical view of the organization’s internal and external environments Helps them evaluate the firm’s fulfillment of its basic mission

SWOT Analysis T Threat External Internal S Strength W Weakness O Opportunity

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Figure SWOT Analysis

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing The Strategic Window ▮ Limited periods when key requirements of a market and a firm’s particular competencies best fit together ▮ Requires a thorough analysis of: Current and projected external environmental conditions Current and projected internal company capabilities How, whether, and when the firm can reconcile environmental conditions and company capabilities

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 4. What are the elements of a marketing strategy?

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Elements of a Marketing Strategy ▮ The target market ▮ Marketing mix variables

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing The Target Market ▮ The group of people toward whom the firm directs its marketing efforts and merchandise Example: Boeing markets most of their products to business buyers such as Delta Airlines ▮ Diversity plays a critical role Example: Growing Hispanic population in United States

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing The Target Market ▮ Targeting consumers in specific global markets represents a challenge and an opportunity

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Mix Variables ▮ Marketing mix - Blending four strategy elements to fit the needs and preferences of a specific target market Product Distribution Promotion Pricing

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Figure Element of a Marketing Strategy and Its Environmental Framework

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Product Strategy ▮ Deciding what goods or services the firm should offer to a group of consumers Customer service Package design Brand names, trademarks, patents, and warranties Lifecycle of a product Product positioning New-product development

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Distribution Strategy ▮ Consumers find their products in the proper quantities at the right times and places ▮ Involves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels ▮ Technology has opened new channels of distribution in many industries

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Promotion Strategy ▮ Communication link between sellers and buyers ▮ Firms may communicate messages: Directly through salespeople Indirectly through advertisements and promotions ▮ Many companies use integrated marketing communications (IMC)

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Pricing Strategy ▮ Deals with methods of setting profitable and justifiable prices ▮ Subject to regulation and public scrutiny ▮ A good pricing strategy: Creates value for customers Builds and strengthens customer relationships with a firm and its products

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing 5. What are the various tools for marketing planning?

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Methods for Marketing Planning ▮ Business portfolio analysis An evaluation of a company’s products and divisions to determine the strongest and weakest

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Strategic Business Units ▮ Key business units within diversified firms Each strategic business unit (SBU): Has its own managers, resources, objectives, and competitors Pursues its own distinct mission and develops its own plans independently ▮ Help focus the attention of company managers ▮ Companies may have to redefine their SBUs as market conditions dictate

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing The BCG Matrix ▮ Developed by the Boston Consulting Group ▮ A market share/market growth matrix that plots market share against market growth potential

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 2 Strategic Planning in Contemporary Marketing Figure BCG Market Share/Market Growth Matrix